Mortgage Mayhem

Abstract

Financial institutions may use several methodologies to mitigate at least one type of especially pernicious operational risk: bad lending. Marshall includes bad lending in a list of potential catastrophic losses that can threaten the viability of a company.1 Not only did bad lending associated with subprime mortgages drive many lenders out of business, but also linkages through the securitization market threatened the viability of many global financial markets.